GST is charge on goods and service all over Canada. The current rate is 6% (dropped from 7% in June 2006)
Necessary comsumable goods and food are not in the GST list. Like tampons, children clothing and shoes. However, GST is on chips, pops, snacks, children toys and accessories.
One golden rule for GST is the Government is only charging the end user one time only for each item. That's means if you are a retailer, you purchase goods from a wholesaler you don't pay GST, but you are responsible to collect GST from your customers.
Business:
If you are a registered business owner, you can ask for a tax exemption when you purchase from a retailer/wholesaler if the goods is for "Resale only". Office supply is taxable because you are the end user, however you can deduct in your expense when you file your tax return.
What you need: Show your registration document (copy) to the cashier before the cashier scan the first item. After the purchase, fill out a simple form.
Children under 15 years old:
When purchasing adult clothing and shoes, you can have GST exempt
Here is a funny story which drive me to write the above tax exemption:
A couple days ago, a lady who is visible minority, went shopping at a major retailer, I was her cashier.
When she approach me she said:
Lady: "This is a business tax exemption purchase." and showed me her business registration in the orginal form. "If you don't know how to do the tax exemption, you can ask your manager to show you how to do it."
I said nothing and check her document, and went set my computer to the tax exemption mode. I just ignore her insult and do my job. She start put up the products and she had 2 separate orders, chips, pops, snack bars, pizza pops, frozen juice, etc. One bag of chips was opened and was half eaten. I said to her
Cashier: " This bag of chip is opened you cannot resale it, so this will not be include in the tax exemption list, the unopened chips can, however you can pay for the chips with this order, but I will charge you for the tax."
She seemed having a shock from me and ask why.
Cashier: " because tax exemption is only for resale goods. Since you opened and ate some chips, it's no longer resellable." she keep asking why.
Cashier: " The basic of GST exemption is that Government of Canada want to make sure GST is only being charged once in the product life cycle and to the end user. If you are a retailer and is going to resale this product, your customer is going to pay the GST. However in this case, you ate the chips you are the end user of the product and are responsible to pay GST."
When I am done scanning the goods, she pays and fill out the tax exemption form.
On her next order I am still suffering from the tax exemption questions. She still don't unerstand why she need to pay GST even she is a business owner. ( She actually is paying the opened bag of chip on her second order) After she left I was laughing to myself and shaking my head because she only understand the tax partially. I know a lot of Chinese immigrants are business owners, we are new to Canada and may not understand all the laws. But don't give Canadian have a chance to laugh at us for our innocent. |
